Sartorius Earnings: Results In Line, but Guidance Revised Downward

Wide-moat Sartorius AG and its bioprocessing subsidiary wide-moat Sartorius Stedim Biotech, or SSB, reported second-quarter earnings that were in line with our expectations. However, the companies revised their full-year guidance downward, based on slow and uncertain recovery momentum. We pushed out our post-covid recovery trajectories by one year and lowered our midterm growth forecasts to reflect a slowdown in China. For Sartorius AG preference shares, we lowered our fair value estimate to EUR 265 from EUR 295. For Sartorius Stedim, we lowered our fair value estimate to EUR 215 from EUR 240. We think the long-term story remains intact and currently view the shares as undervalued, but acknowledge that the near-term outlook is uncertain.